1. MEDICARE AND MEDICAID OVERVIEW Nancy Kusmaul, PhD, MSW

2. What is Medicare?  Medicare is a health insurance plan that was created as an amendment to the Social Security Act in 1965.  Medicare services include hospital care, skilled nursing facility care, home health care, physician services, diagnostic tests, and prescription drug coverage.  Medicare beneficiaries are eligible to receive services up until their death.

3. Who Does It Cover?  Medicare covers those over age 65 who meet certain work requirements.  In 1972, amendments were added covering people under age 65 who are permanently disabled and those with End Stage Renal Disease.  In 2001, younger people with ALS were added to those eligible for coverage.

4. Medicare A-B-C-D  Medicare A is hospitalization insurance. All participants who meet work requirements receive this part.  Medicare B is health insurance. Participants opt-in to this coverage and pay a monthly premium. People with higher incomes pay a higher premium.  Medicare C is Medicare Advantage. Participants can choose this option in lieu of Part A and Part B. A private insurance company then administers their Medicare and may cover additional services.  Medicare D is optional prescription drug coverage.

5. Preventive Services  Medicare covers a one time “Welcome to Medicare” physician visit/physical to establish care.  After the Affordable Care Act, co-insurance payments were removed for preventive services including screenings, certain vaccines, and nutrition counseling. It also added a free annual wellness exam for beneficiaries.

6. Prospective Payments  Medicare revolutionized health insurance payments in 1983, when it changed to a prospective payment system based on diagnosis related groupings (DRGs). This was a change from previous payments, which were based on actual costs.

7. End-of-Life Care  Medicare-covered services may be used for either curative or palliative (symptom relief) purposes, or both.  Medicare offers additional benefits in the areas of Advanced Care Planning and Hospice.

8. End-of-Life Care: Hospice  Terminally ill Medicare beneficiaries who do not want curative treatment may qualify for Medicare-covered Hospice Care.  Hospice offers a comprehensive services, including nursing, counseling, terminal illness related medications, and limited respite care to assist family caregivers.  Hospice care can be provided in the patient’s home, a nursing home, a hospital, a hospice inpatient unit, and in some communities, in free-standing hospice houses.  Eligibility for Medicare covered Hospice requires physician confirmation that the patient is expected to die within six months if the illness runs a normal course. If the Medicare patient lives longer than six months, hospice coverage may continue if the patient continues to meet eligibility criteria.

9. End-of-Life Care: Advance Care Planning  Advance directives are written instructions that reflect a patient’s wishes for health care in the event that a patient is unable to speak for her/himself. The exact format of these directives vary from state to state. These documents are often completed as a result of a discussion with a medical provider.  Starting January 1, 2016, Medicare will add conversations about advance care planning as a billable service provided by physicians and other health professionals (such as nurse practitioners). This benefit will include advance care planning provided in medical offices, hospitals and nursing homes.

10. Accountable Care Organizations (ACOs)  ACOs are groups of providers- physicians, hospitals, etc.- who come together voluntarily to provide coordinated care to Medicare patients.  The goal is to decrease duplication, and to make sure complex patients get the right care at the right time.  ACOs that meet this goals are eligible for a cost- share from Medicare.

11. Community Based Long Term Care  Medicare does not cover long term homemaker or personal care services.  Home Health Services are covered with a physician’s order IF  The patient requires intermittent skilled nursing care beyond blood draws  The patient would benefit from specific, short term therapy services (physical, occupational, or speech) to address a specific condition  Care is being provided by a Medicare-certified home health agency  The patient is homebound  Source: Medicare.gov

12. Long-Term Care  Nursing homes that accept Medicare and Medicaid are subject to federal and state certification laws.  Despite popular belief, Medicare does not cover long- term, custodial nursing home care.  Medicare covers up to 100 days of subacute care in a skilled nursing facility following a 3 day hospital stay. Days 1-20 are covered in full, Day 21-100 have a $161*/day co-insurance payment (*in 2016).

13. Long-Term Care  Patients who require long-term custodial nursing home care generally need to use their personal funds and savings to pay for care. Costs generally range from $80,000-100,000/year depending on what part of the country you are in.  Some long term care insurance covers nursing facility care. The daily per-diem varies, and the covered individual may be responsible for costs over and above this amount.

14. Medicaid and Nursing Home Care  Patients who are unable to cover the costs of nursing home care may qualify for Medicaid.  They may need to spend their own funds on care before they are eligible.  They may qualify for long term care Medicaid even if they have not qualified for Medicaid in the past.  Transferring assets to family members (or others) for less than market value may result in Medicaid penalties, in the form of Medicaid not paying for nursing home care for a period of time.  Medicaid recipients are required to pay a monthly cost- share to the nursing home.

15. Spousal Medicaid Rules  Community spouses of nursing home residents are protected from losing their income and assets to pay for nursing home care.  For spouses who live in the family’s home, the home will not be counted as an asset towards the nursing home resident’s case.  A community spouse is eligible to keep half of the couple’s joint assets up to approximately $120,000/year, and a portion of the joint income.

16. What is Medicaid?  Medicaid is health insurance for low-income individuals.  It was created in 1965 as an amendment to the Social Security Act.  It provides grants to states who each administer their own programs under federal parameters.  It is one of the largest payers of healthcare in the United States.

17. Children’s Health Insurance Program (CHIP)  An important amendment to the Medicaid program.  Created in 1997, it provides federal matching funds to states to provide health insurance for children whose family incomes are too high to qualify for Medicaid but too low to pay for private coverage.

18. The Affordable Care Act (ACA)  Signed into law on March 23, 2010.  Created comprehensive health insurance reforms.  Provided provisions to expand coverage to previously uninsured groups through Medicaid expansion and a Health Insurance Marketplace.  There were many other provisions designed to improve health care efficiency and access to preventive services.

19. Medicaid Expansion and the ACA  Under the Affordable Care Act (ACA), states have the option to expand their Medicaid programs to include nearly all low income adults with incomes at or below 138% of the federal poverty level.  This provision provides full federal financing for the first three years, gradually decreasing to 90% federal funding.  States cannot receive the enhanced federal funding for the expansion unless they cover all newly eligible adults through 138% FPL.